MARIAN M. FITZGERALD, Plaintiff–Respondent, v. JASON D. DUFF, Defendant–Appellant.
Defendant Jason D. Duff appeals from an August 8, 2012 order denying reconsideration of a June 6, 2012 order fixing his child support obligation after imputing income at a level defendant maintains was unfounded. We reverse the order denying reconsideration and remand the matter to the Family Part for further proceedings, including a plenary hearing if necessary to determine defendant's income and/or his ability to earn income for the purpose of calculating child support.
Plaintiff Marian M. Fitzgerald is the maternal grandmother and legal custodian of defendant's seven-year–old child. After charges were filed accusing defendant of physically abusing the child, plaintiff was awarded sole legal and physical custody and defendant's parenting time was ordered to be supervised. The record shows child support was initially fixed on March 12, 2012, by a child support hearing officer, who calculated defendant's obligation under the New Jersey Child Support Guidelines, R. 5:6A. Using a gross weekly income of $384, and accounting for child support defendant paid for an older child, the hearing officer recommended defendant pay $67 per week.1 It is not disputed that the recommendation was later entered as an order by a Family Part judge.
On April 30, 2012, defendant filed a motion to recompute child support using his actual earnings and parenting time. Defendant asserted an error was made in the hearing officer's child support calculation, which he incorrectly states required his payment of $83 per week.2 Defendant attached documentation showing he electronically filed his 2011 income tax return, which reported taxable income of $21,000. The documents reference defendant was entitled to one-half the business income from an entity known as “Mr. Tattoo 2 LLC,” located on High Street in Burlington City.
In response, plaintiff filed a certification opposing modification of the support order and suggesting defendant's accurate income warranted a higher child support obligation. She argued defendant had not fully disclosed his income, much of which he did not report, and had not attached his complete income tax return. She provided copies of a web site describing defendant as the owner of Mr. Tattoo, which operated two New Jersey locations, listed a Wilmington, Delaware shop, and advertised “Philly Shop coming soon [,]” suggesting a location would open in Philadelphia, Pennsylvania. Plaintiff averred defendant provided tattoo services for professional football players and noted his web page featured three staff tattoo artists, offered body piercing, and sold clothing under the brand “Addicted.” Plaintiff attached photographs taken from defendant's Facebook page of defendant's speed boat, which is named “Addicted”; a 2011 Chevrolet Camaro, parked in front of his store and maintained defendant also owned a Lincoln Navigator; and his elaborate, tropical wedding, diamond engagement and wedding bands and him throwing $100 bills. Finally, she supplied copies of defendant's various social media comments evincing his success, including his statement that in four hours he earns $250, his schedule had “been packed so [he could] pay for this wedding[,]” and he bought television advertising spots.
During the motion hearing before the Family Part, no testimony was taken.3 The judge accepted plaintiff's position that her proofs show defendant earned more than the $384 per week as used by the hearing officer to calculate child support. The judge specifically commented on the defendant's success, evinced by the business' elaborate web site, and the multiple store locations in two states, and determined imputation of income in excess of the amount claimed was appropriate. The judge stated, “whenever you have a cash business, the [c]ourt has to be ․ circumspect[,] because I do believe that there's more money than what's available or what's being shown on the tax returns.” The judge concluded:
[B]ased on everything before me, I believe an imputation of income to the defendant is appropriate. He has a business with two locations. It's ․ a large cash business and the [c]ourt believes that the records aren't truly reflective of the income. The problem is that the [c]ourt has nothing other than what was stated last time, which is that there was evidence based on an internet page on MySpace that defendant makes in excess of $250,000 from the business of which he's the sole owner.
I have the web page, I have photographs of his boat․ And certainly the boat, in and of itself, indicates a lifestyle beyond $15,000 per year.
I think it's appropriate ․ without more information, to impute income of at least [$]100,000 per year ․
․ to Mr. Duff. If Mr. Duff wants to submit all of his financials, certainly the [c]ourt will look at it, and if there's a need to revise it, I will․ The [c]ourt, in its discretion, finds that to be an appropriate amount to impute to the defendant based on the information provided.
The judge calculated defendant's child support obligation as $264 per week, along with payment of arrearages, effective January 24, 2012. Counsel fees were not awarded.
Defendant filed a second motion to reconsider the calculation of child support, alleging it was “based upon the absence of any competent[,] admissible evidence of $100,000 income attributed to [d]efendant.” Defendant explained he is a fifty percent owner of the business in Burlington City, but his partner performs no work at that location. Defendant attached the 2011 partnership return showing gross annual revenue of $50,710 and a net operating loss of $3,526; 4 portions of the 2010 partnership return showing distributions of $3,176; defendant's individual 2009 income tax return, reporting total income of $10,102; 5 his 2010 individual income tax return reporting total income of $22,376 ($18,000 reported on Schedule C and $4,000 from Mr. Tattoo 2 LLC); and his 2011 Schedule C reporting $22,000 in income. Defendant refuted the notion he earned $100,000. He asserted the Camaro was financed, attaching a payment notice; stated the boat was a 1983 twenty-three foot, Formula Thunderbird that he had sold on September 9, 2011, for $1,700; and claimed his family paid for his honeymoon. Finally, defendant averred any tattoos he designed “for famous people” were done “for free” so he could use the celebrity's name to promote his business. Defendant did not request a plenary hearing.
Plaintiff challenged the accuracy of defendant's submissions, advanced the suggestion the court should examine defendant's business books and records, repudiated the alleged boat sale as “patently absurd[,]” attached defendant's social media comments and a photograph showing he purchased another boat that “sleeps 12 people, ․ has an onboard grill and cable TV.” She provided photographs of the interior of defendant's business locations, which included a Camden store, and comments regarding the television advertising he purchased.
Although noting the documentary evidence regarding the amount of defendant's income offered by each side was at odds, the judge noted proof of multiple business locations, a new car, a “very nice” boat, and the use of television advertising, evinced luxury and “[were] inconsistent with defendant's position” he earns a mere $25,000 per year. He denied defendant's motion for reconsideration in an order filed August 8, 2012, stating, “I'm just not convinced that the defendant's lifestyle and finances are what he purports them to be. So, I'm going to keep the imputation at $100,000. And—so that motion is going to [be] denied for reconsideration [sic].” Defendant filed a notice of appeal on September 11, 2012.
Our review is limited solely to the order that denied plaintiff's motion for reconsideration.6 Denial of a motion for reconsideration rests within the sound discretion of the trial judge. Fusco v. Bd. of Educ. of City of Newark, 349 N.J.Super. 455, 462 (App.Div.), certif. denied, 174 N.J. 544 (2002). “Motions for reconsideration are granted only under very narrow circumstances[.]” Ibid. We have long recognized that:
Reconsideration should be used only for those cases which fall into that narrow corridor in which either (l) the [c]ourt has expressed its decision based upon a palpably incorrect or irrational basis, or (2) it is obvious that the [c]ourt either did not consider, or failed to appreciate the significance of probative, competent evidence.
[Ibid. (quoting D'Atria v. D'Atria, 242 N.J.Super. 392, 401 (Ch. Div.1990)).]
A motion for reconsideration must “state with specificity the basis on which it is made,” including a statement of the matters which are believed the be error. R. 4:49–2.
Defendant's arguments on appeal are viewed as a challenge to the trial judge's application of discretion, as he failed to reconsider the order imputing income, which he maintains was based on a palpably incorrect basis. We agree.
“Our case law has consistently held that when a parent, without just cause, is voluntarily unemployed or underemployed, income may be imputed to that parent to provide for the child's needs.” Caplan v. Caplan, 182 N.J. 250, 268–69 (2005). See also Halliwell v. Halliwell, 326 N.J.Super. 442, 448 (App.Div.1999) (stating the court's use of potential earning capacity of an individual, rather than actual income should be considered when fixing the ability to pay child support). Moreover, in addition to a party's income, any assets may be considered when determining a fair and just child support award. N.J.S.A. 2A:34–23a(3).
Once the trial court decides that income should be imputed, the next step is to determine the reasonable amount of income to be imputed to that party. In performing that function, the court should apply the factors listed in the guidelines as well as any other evidence related to each party's ability to earn income.
[Caplan, supra, 182 N.J. at 270.]
Here, the trial judge rejected the claim of limited income in light of the evidence provided by plaintiff evincing defendant's spending ability in excess of such earnings. However, his decision lacked the fundamental fact-finding required by Rule 1:7–4, to support his conclusion defendant had the ability to earn $100,000.
Rule 1:7–4(a) denotes a trial court's obligation to make findings of facts and state conclusions of law “on every motion decided by a written order that is appealable as of right[.]” Our cases have repeatedly stressed the importance of this singular trial court responsibility. The oft-cited instruction by the Supreme Court regarding trial court fact-finding bears repeating:
Failure to perform that duty “constitutes a disservice to the litigants, the attorneys and the appellate court.” Kenwood Assocs. v. Bd. of Adj. Englewood, 141 N.J.Super. 1, 4 (App.Div.1976). Naked conclusions do not satisfy the purpose of [Rule ] 1:7–4. Rather, the trial court must state clearly its factual findings and correlate them with the relevant legal conclusions.
[Curtis v. Finneran, 83 N.J. 563, 569–70
Omission of this duty is particularly problematic where the decision is discretionary, such as the amount of imputed income. The standards set forth in the Child Support Guidelines and cases must be reviewed, understood, and applied to the facts to support a discretionary determination. Without findings relevant to the legal standards, the litigants and the reviewing court “can only speculate about the reasons” for the decision. Rosenberg v. Bunce, 214 N.J.Super. 300, 304 (App.Div..1986). More important, this court is precluded from conducting any “meaningful review.” Ronan v. Adely, 182 N.J. 103, 110 (2004).
On reconsideration, defendant specifically requested the judge provide the factual basis for the level of income imputed. His motion included purported copies of defendant's individual income tax returns, more complete business reporting returns, and copies of documents addressing some of plaintiff's contentions regarding defendant's acquisition of assets, generally showing the use of $100,000 was error. Although we would agree defendant's submissions were a far cry from “all of his financials,” as suggested were needed by the judge to warrant further review of the imputation issue during the June 5, 2012 hearing, we, nevertheless, conclude defendant provided adequate information to trigger reconsideration of the initial determination. This is particularly so when the basis for the initial determination was not stated. Unfortunately, rather than making the necessary review and explaining why it was determined $100,000 must be imputed, the judge merely rejected the motion for reconsideration. It is clear the judge could not have rendered the decision made of this record, making his invocation of “discretion” unsupported.
“The exercise of judicial discretion is not unbounded and it is not the personal predilection of the particular judge.” Clark v. Clark, 429 N.J.Super. 61, 72 (App.Div.2012) (internal quotation marks and citation omitted).
Rather, the nature of judicial discretion requires a trial judge to determine whether to act, and if so, to render a decision guided by the spirit, principles and analogies of the law, and founded upon the reason and conscience of the judge, to a just result in the light of the particular circumstances of the case.
[Ibid. (quoting Smith v. Smith, 17 N.J.Super. 128, 132 (App.Div.1951) (citations omitted), certif. denied, 9 N.J. 178 (1952)).]
On reconsideration, defendant justifiably sought an explanation of why the trial judge imputed $100,000 income, despite his tax documentation and other proofs, albeit limited, rebutting plaintiff's contentions. The court had an obligation to consider all of the evidence, identify what was accepted, what was rejected, and why it was rejected in light of evidence in the record. The dispute of material facts in this matter is squarely presented. Defendant does not deny acquisition of the assets identified by plaintiff, which on their face appear beyond the ability of someone earning less than $500 per week. Further, defendant himself wrote he charges $250 for four hours of work, which is some support for the extent of defendant's income. However, this must be weighed along with defendant's income tax returns. Again, we note the tax documents raise many additional questions regarding the source of defendant's recurring Schedule C income; the expenses paid by his business entity; how the employee-artists, whose craft talents are proximately displayed on his web site, are paid despite no reported wages paid by the business; and the veracity of claims surrounding celebrity endorsements and his partners. Although, the record strongly suggests, as identified by the trial judge, that defendant's reported income appears inaccurate, such a determination must abide additional review and cannot merely be assumed.7 The court must conduct the necessary review to resolve all disputed questions, and ground an imputation of income on facts or other evidential authorities.
We reverse the order denying reconsideration and remand to the Family Part for further review. We note, this record suggests conflicting factual assertions, including credibility determinations, the resolution of which may necessitate a plenary hearing; however, the nature of further proceedings is left to the assigned trial judge.
Reversed and remanded.
FN1. The basis of defendant's income was not stated in the order or otherwise apparent from the record.. FN1. The basis of defendant's income was not stated in the order or otherwise apparent from the record.
FN2. Defendant's contention of the amount of the award is incorrect. The amount of support for his older child, under Docket No. FD–03–508–04, was set at $69 per week after defendant was granted a parenting time adjustment. The support calculation for the child who is the subject of this proceeding, Docket No. FD–03–952–12, considered the pre-existing order for the older child's support and did not include a parenting time adjustment, presumably because defendant only participated in supervised visitation. The weekly obligation was set at $67, not $83.. FN2. Defendant's contention of the amount of the award is incorrect. The amount of support for his older child, under Docket No. FD–03–508–04, was set at $69 per week after defendant was granted a parenting time adjustment. The support calculation for the child who is the subject of this proceeding, Docket No. FD–03–952–12, considered the pre-existing order for the older child's support and did not include a parenting time adjustment, presumably because defendant only participated in supervised visitation. The weekly obligation was set at $67, not $83.
FN3. Counsel for the parties appeared and plaintiff was present; however, defendant was not present as he was on his honeymoon.. FN3. Counsel for the parties appeared and plaintiff was present; however, defendant was not present as he was on his honeymoon.
FN4. The poor quality of the reproduction of the documents makes it impossible to determine how the net operating loss was calculated.. FN4. The poor quality of the reproduction of the documents makes it impossible to determine how the net operating loss was calculated.
FN5. The return includes $13,000 from business income reported on a Schedule C and an almost $7000 loss from Mr. Tattoo 2 LLC.. FN5. The return includes $13,000 from business income reported on a Schedule C and an almost $7000 loss from Mr. Tattoo 2 LLC.
FN6. Defendant is out of time to appeal the underlying June 6, 2012 order. See R. 2:4–1 (providing appeals must be filed within forty-five days of entry of a final order). Although the time for appeal is tolled during the period a motion for reconsideration is filed and pending, R. 2:4–3(e), the forty-five day limitations period resumes upon entry of the order for reconsideration. Here, when reconsideration was filed, nineteen days had passed following the entry of the order fixing support. Therefore, appeal of the June 6, 2012 order should have been filed by September 4, 2012.. FN6. Defendant is out of time to appeal the underlying June 6, 2012 order. See R. 2:4–1 (providing appeals must be filed within forty-five days of entry of a final order). Although the time for appeal is tolled during the period a motion for reconsideration is filed and pending, R. 2:4–3(e), the forty-five day limitations period resumes upon entry of the order for reconsideration. Here, when reconsideration was filed, nineteen days had passed following the entry of the order fixing support. Therefore, appeal of the June 6, 2012 order should have been filed by September 4, 2012.
FN7. In the event the court formally makes findings regarding materially false income tax filings, it must formally report the findings to the appropriate authorities. See Sheridan v. Sheridan, 247 N.J.Super. 552, 563 (Ch. Div.1990) (setting forth judge's responsibility, citing Code of Judicial Conduct, to report a crime).. FN7. In the event the court formally makes findings regarding materially false income tax filings, it must formally report the findings to the appropriate authorities. See Sheridan v. Sheridan, 247 N.J.Super. 552, 563 (Ch. Div.1990) (setting forth judge's responsibility, citing Code of Judicial Conduct, to report a crime).